Rapid Refunds Rapidly Take Your Money

At tax time, most Americans find themselves expecting a refund.
That\'s no surprise, as most people have too much money withheld
from their paychecks. It would be a simple matter to adjust the
withholding so that the amount of money withheld is roughly
equal to the amount of tax owed, but most people are content to
get a refund check every spring.

Until relatively recently, when a taxpayer had a refund coming,
he or she had to wait two months or so while the refund was
processed and the check mailed. In recent years, however, major
tax preparers have come up with a profitable alternative that
keeps the taxpayer from having to wait so long - the Rapid
Refund.

The rapid refund, also known as a refund anticipation loan, is a
loan given by the tax preparing company that is backed by the
refund itself as collateral. The taxpayer that agrees to the
service will receive his or her refund, less a service fee,
often in as little as 24 hours.

On the surface, this might seem like a great idea. Pay a fee,
and get the refund now instead of later. But there are some
problems with this service that many people either don\'t know
about or overlook:

# The fees are high; they average about $100 per refund.

# When the fees are considered as interest, the interest rate
can amount to more than 500% annually, a rate comparable to
those of payday loans.

# The people who elect to take the rapid refunds are often the
people who can least afford them, so the process tends to take
advantage of the poor. # The fees you pay for the rapid refund
aren\'t getting you your refund that much faster Professional tax
preparers usually file returns electronically, so the refunds,
without the extra service, can often be had in as little as ten
days..

# You are paying someone to lend you your own money!

If you really, really need your refund quickly and you don\'t
mind paying a hefty fee to get it a few days sooner, then go
ahead and buy the rapid refund. For most people, however, the
service is a poor investment.